You want the option to stop working someday, so it’s important to begin saving for retirement early. One way to do this is by finding a municipal job that provides a retirement plan. One example of a municipal retirement plan is the California Public Employees Retirement System (CalPERS). Because CalPERS offers different types of retirement plans along with deferred compensation, it’s in your best interest to learn more about the program.
CalPERS Types of Retirement
CalPERS offers three types of retirement. Disability retirement is for employees who become ill or injured and can no longer perform their duties. Industrial disability retirement is for safety members, or members whose agency contracts for the benefit, that experience a job-related illness or injury and cannot perform their duties. Service retirement is a lifetime benefit for employees 50 or older with five or more years of service credit who want to permanently stop working. If the employee became a member on or after January 1, 2013, they must be at least 52 years old to retire with benefits.
CalPERS Deferred Compensation Plans
CalPERS offers two types of deferred compensation plans. The CalPERS Supplemental Income 457 Plan is for participating public agency and school employees. The plan is a voluntary savings program that lets employees defer any amount, within annual limits, from their paycheck on a pretax basis. Employee contributions and earnings may benefit from tax-deferred compounding. Income taxes on contributions and earnings are paid upon withdrawal, typically in retirement. The CalPERS Supplemental Contribution Plan is for state employees and members of Judges’ Retirement Systems I and II. Participants make periodic cash contributions or after-tax payroll deductions. Contribution amounts and allocations may be changed, and account balances transferred among investment options. Earnings grow tax-deferred until the participant begins to take withdrawals in retirement or after separation from state employment. Taxes are paid on pretax earnings.
Importance of Retirement Plans
Employer-sponsored retirement plans are important as it typically takes several years to accumulate enough money to live comfortably on a fixed income, therefore, employees need to start saving early through as many sources as possible. Even with lowered expenses, retirees want to live as closely as possible to the standard they became accustomed to during their working years. With people living longer, retirement may last 30 years or longer, increasing the need for steady income.
Find a Municipal Job With a Retirement Plan
Let MuniTemps find you a municipal job that offers a retirement plan. It can help you save for the future so can live comfortably in your later years. See which roles are open today!